On August 26, the Shenzhen Special Economic Zone (SEZ) celebrated the 40th anniversary of its establishment. In those four decades, Shenzhen has grown from a small fishing village on the southern coast of Guangdong province into a vibrant high-tech metropolis. In 2018 Shenzhen’s GDP surpassed that of neighboring Hong Kong, reaching CNY2.69 trillion. The SEZ is one of the success stories of the late Chinese leader Deng Xiaoping’a reform and opening up policies. Part of the Shenzhen spirit is that everyone can become a “maker” and a “dreamer”, the Global Times reports. The southern China city is the country’s largest migrant city, which has been absorbing talent, capital and new ideas.

One of Shenzhen’s motto’s is “Innovation encouraged and failure tolerated,” encouraging China’s top talents to stay in the coastal city and build it into a world tech powerhouse. People are encouraged to be innovative, to think out of the box and to brainstorm with people of different backgrounds. The cost of failure is also extremely low, and the city takes failure as normal as having breakfast, according to one entrepreneur. There is no city in the world where you can find more components readily available to incorporate into a new product as in Shenzhen. Driven by supportive policies, a growing number of talent, and an innovative ecosystem, Shenzhen contributed nearly half of the 49,000 applications for international patents that the country filed in 2019, which was also ranked as the fourth worldwide. China’s top tech companies Huawei, ZTE, Tencent and DJI all have their headquarters in Shenzhen. In response to the U.S.-China trade war, many tech companies have begun sourcing all necessary parts from Chinese firms and shifting sales to the domestic market. Facing uncertainties overseas, more local high-tech firms have been inspired to develop more innovative products and elevate their core competitiveness, company representatives told the Global Times.

Chan Wai-kuen, now in her 80s, was one of the first Hong Kong businesspeople to invest in the city after its opening-up. On June 28, 1982, her first project in the city – Shekou Shopping Center – opened, officially as “a metal warehouse”. She remembers that “people elbowed in, even some floor tiles broke under the trampling of the crowds. She sold 500 fans and 150 color televisions that day, exhausting all her stock and recouping her investment. The “metal warehouse” developed into a 35-floor tower on the same site in 1995.

The China Daily reports that, as Chan’s story indicates, over the past 40 years, the city itself gained tremendously from its mission of becoming a trailblazer in the development of the country. Last year, the city’s gross domestic product exceeded CNY2.6 trillion, comparable to Singapore. Its per capita GDP is about USD30,000, similar to that of France. Now, more than 100 Fortune Global 500 corporations have operations in Shenzhen, among which eight are headquartered in the city.

The main experience Shenzhen provides the country in its reform and development is that reform should always be market-oriented, said Tao Yitao, Senior Researcher of Special Economic Zones at Shenzhen University. Thanks to its pro-innovation business environment, Shenzhen has successfully transited from its initial labor- and resource-intensive takeoff phase to an innovation-driven development stage, turning the city from an importer of investment and know-how to an exporter.

As a pioneer in the reform and opening-up drive, Shenzhen used to rely on the processing trade. After enjoying a high economic growth rate of nearly 40% annually from the 1980s to the early 1990s, Shenzhen – due to limited land resources and rising labor costs – gradually turned its focus to developing high value-added industries such as IT, biotechnology, new materials and high-end equipment manufacturing. Now it has become a magnet for technology startups and serves as headquarters for famous high-tech companies. “While other regions are also competing to become the frontrunner, you must think outside the box,” said Wang Weizhong, Party Secretary of Shenzhen. “We should not just focus on the 1,997 square kilometers of Shenzhen. We must look at Shenzhen from a broader view.” The local government aims to build Shenzhen into a core engine, in terms of both technology innovation and financial support, driving development of the Guangdong-Hong Kong-Macao Greater Bay Area and, by 2035, into a global technology innovation hub, the China Daily reports.

On the occasion of the anniversary, a seventh land border crossing – Liantang – between Shenzhen and Hong Kong was inaugurated. Carrie Lam, Chief Executive of the Hong Kong Special Administrative Region (HKSAR), attended the opening ceremony, saying the facility signals closer ties between the Chinese mainland and Hong Kong. Due to Covid-19 the border checkpoint is only open for cargo clearance, not for passengers, private cars and buses.

China is home to four of the world’s five largest unicorns – start-ups valued at more than USD1 billion – as the country recorded 227 such companies at the end of March, despite its protracted tech and trade war with the United States. That total was behind the U.S. tally of 233 unicorns in the same period, according to this year’s edition of the Hurun Global Unicorn Index released by Shanghai-based Hurun Research Institute. It said the U.S. and China accounted for a combined 79% of the world’s 586 known unicorns, based on valuations at the end of March. “The U.S. and China continue to dominate, despite representing only 40% of the world’s GDP and a quarter of the world’s population,” said Rupert Hoogewerf, Chairman and Chief Researcher of privately-held Hurun Report. “The rest of the world needs to wake up to providing an ecosystem that allows unicorns to flourish.”

The total value of all known unicorns in the world is USD1.9 trillion, equivalent to the GDP of Italy, according to Hurun Research. “These young companies, only nine years old on average, are the world’s most exciting start-ups, leading a new generation of disruptive technology and attracting the world’s top young talent,” Hoogewerf said. The findings bolster China’s efforts to close the gap with the U.S. on fostering many of the world’s most innovative companies, while dealing with the disruptions caused by the coronavirus pandemic as well as Beijing’s complex tech and trade war with Washington. The world’s two largest economies are locked in fierce competition to drive major hi-tech sectors, including artificial intelligence (AI), autonomous driving, robotics and big data.

Alipay operator Ant Group, the digital financial services arm of Alibaba Group Holding, was the top-ranked unicorn in the Hurun list, with a valuation of USD150 billion on the back of its planned initial public offering (IPO) in Shanghai and Hong Kong. The world’s second-largest unicorn is TikTok owner ByteDance, with a valuation of USD80 billion. However, U.S. President Donald Trump has threatened to put the popular short video app “out of business” in the U.S. if it is not sold by September 15. Third-ranked Didi Chuxing, China’s biggest ride-hailing services provider, had a valuation of USD55 billion. It was followed by Lufax Holding, which runs an online wealth management and peer-to-peer lending platform, with a USD38 billion valuation. Billionaire Elon Musk’s Space Exploration Technologies Corp, better known as SpaceX, took the No 5 spot on the Hurun list with a valuation of USD36 billion.

The U.S. and China this year added 30 and 21 new unicorns. The world’s unicorns are based in only 29 countries around the world, spread across 145 cities. Beijing, with 93 unicorns, led the world’s top five cities in which billion-dollar start-ups have flourished. It was followed by San Francisco, with 68 unicorns; Shanghai, with 47; New York, with 33; and Shenzhen, with 20. As a region, Silicon Valley leads the world with 122 or 21% of the world’s unicorns, according to Hurun Research. There are 39 Chinese unicorns engaged in e-commerce, the top sector. There are 21 in AI, 18 in financial technology, 16 in logistics and 16 in health tech, the South China Morning Post reports.